commissioning of federal energy savings performance contracts (espc) may 20, 2003 doug dahle...

Commissioning of Federal Energy Savings Performance

Contracts (ESPC)

May 20, 2003

Doug Dahle

National Renewable Energy Lab

Overview

• Federal ESPC Program Overview

• Commitment to Integrate Commissioning

• ESPC Project Implementation Process

• Working Draft for Super ESPC Contracts

• Commissioning Provider Input

• Potential for Commissioning Agent Role

Federal ESPC Program OverviewPrinciples

ESPC is a contracting method whereby the ESPC is a contracting method whereby the contractor (Energy Service Co.- ESCO) contractor (Energy Service Co.- ESCO) incurs the cost of implementing energy incurs the cost of implementing energy savings measures and is paid from a share savings measures and is paid from a share of any energy and energy-related savings of any energy and energy-related savings directly resulting from implementation of directly resulting from implementation of such measures during the term of the such measures during the term of the contract.contract.

ESPC PrinciplesReallocating Agency Utility & Reallocating Agency Utility &

O&M BudgetO&M Budget

$$

Reduce Energy & Related O&M CostsReduce Energy & Related O&M Costs ESCO Payments for Achieved SavingsESCO Payments for Achieved Savings Achieve cost savings for the governmentAchieve cost savings for the government

Utility Utility BillBill



ContractorContractorPaymentPayment

Govt.Govt.ShareShare

Govt. Govt. ShareShare EnergyEnergy

Cost Cost SavingsSavings

Before ESPCBefore ESPCContractContract

During ESPCDuring ESPCContractContract

After ESPC After ESPC ContractContract

ESPC Principles• No Federal Capital Appropriations Required• 25 year Contract Authority• Retrofits of Existing Federal Buildings• Agency Infrastructure Improvements• ESPCs deliver 2 Principle benefits• 1- Energy & Related O&M Cost Savings

– Guaranteed Savings – M&V (legal requirement)

• 2- Facility Operations Improvements– Confirmed by Commissioning (contract requirement)– ESCO Conducts Commissioning & Agency Oversight

DOE FEMPESPC Program Highlights

• Federal ESPCs (’86-’96) – $300M– Transaction Cycle - 2+ years to award

• Estimated Federal Energy Investment - $2-3B – Critical Need to reduce Transaction Cycle

• Procurement Vehicle for Streamlined ESPCs • DOE Master Contracts called “Super ESPCs”

– Usable by all Federal Agencies– Streamlines Agency ESPC Procurements

• DOE ESPCs (’98 – ’02) - $400M

DOE FEMPESPC Program Keypoints

• DOE Super ESPCs– Competitive Procurement for 6 DOE Regions– Incorporates Standard Provisions for ESPCs– Awards to Multiple ESCOs - $750M/region

• All Energy Efficiency & Renewable Technologies

– Allows Agency to Select from DOE ESCOs– Site Specific Terms & Conditions– Transaction Cycle – 10-12 months (avg.)

DOE Super ESPC RegionsDOE Super ESPC Regions

Denver RODenver RODenver RO

CENTRALCENTRAL

Seattle

RO

Seattle Seattle

RORO

WESTERNWESTERN

Philadelphia RO

Philadelphia Philadelphia

RORO

MID-ATLANTIC

MID-ATLANTIC

Boston ROBoston ROBoston RO

NORTHEASTNORTHEAST

SOUTHEASTSOUTHEAST

Atlanta

RO

Atlanta Atlanta

RORO

Chicago ROChicago ROChicago RO

MIDWESTMIDWEST

DOE FEMPESPC Program Goals

• Annual ESCO Investment - $120M

• Continuous Improvement of Public/Private Partnerships

• Focus on Federal/ESCO Business Practices– M&V Plans & Reporting Consistency– O&M during 15+ year term– Commissioning at Project Acceptance

Commitment to Integrate Commissioning

• ESCO Industry Support for Commissioning• DOE forms Fed/ESCO Working Group• Objectives

– Mainstream ESPC Commissioning– Jointly develop consistent practices/tools– NREL Contracts for Cx Expertise to support

working group activity• Farnsworth Group – March ‘03

Commitment to Integrate Commissioning

• Tasks for Farnsworth Group• 1) Participate in WG Telecons & Meetings• 2) Develop Guidelines/Templates/Tools• 3) Conduct Workshop for Govt & ESCOs

– 3/24 workshop identified needs for ESPCs

• 4) Develop Information Brochure for Agencies– Benefits of Commissioning and Agents

• 5) Pilot Project – Farnsworth as Cx Agent– Project Intent thru Lesson Learned 1 year after

acceptance – (process feedback)

ESPC Project Implementation Process

• Four Phases• 1) Project Planning

– Agency Selects ESCO

• 2) Initial Project Development– ESCO Submits Initial Proposal (at risk)

• 3) Negotiate & Award Delivery Order– ESCO Investment Grade Audit & Proposal

• 4) Implementing Delivery Order– Design/Construction/Acceptance– Multi-year Performance Period

Phase 1: Project PlanningPhase 1: Project Planning

ConsiderIAA

ConsiderIAA

Explore Opportunities, Assemble Acquisition Team and PlanExplore Opportunities, Assemble Acquisition Team and PlanExplore Opportunities, Assemble Acquisition Team and Plan

COR approval for

ESCO to submit

initial proposal

COR approval for

ESCO to submit

initial proposal

COR &agency review

process andexplore

opportunities

COR &agency review

process andexplore

opportunities

Assemble acquisition team

Assemble acquisition team

Informal communications &

mutual interest in pursuing a project

Informal communications &

mutual interest in pursuing a project

ES

CO

Join

t E

ffo

rtA

ge

nc

y

Working Draft Super ESPC Cx Process – Phase 1

• DOE Introduce Cx Process

• Cx Activity and Submittals to be provided by ESCO

• Agency responsible for Cx process and deliverables oversight and review

Phase 2: Initial Project DevelopmentPhase 2: Initial Project DevelopmentSelect an ESCO and Begin DO RFP Select an ESCO and Begin DO RFP Select an ESCO and Begin DO RFP

Verify IDIQ ordering capacity

Verify IDIQ ordering capacity

Explore Cong. Notification process

Explore Cong. Notification process

NOIindicates agency commitment &

ESCO’s expenses recoverable

NOIindicates agency commitment &

ESCO’s expenses recoverable

Review ofinitial

proposal

Review ofinitial

proposal

Prelim.site

survey

Prelim.site

survey

Complete DO RFP & NOI & obtain DOE CO review

Complete DO RFP & NOI & obtain DOE CO review

Initial proposalkickoff meeting

Initial proposalkickoff meeting

Ag

en

cy

Join

t E

ffo

rtE

SC

O

Initialproposal

Initialproposal

Start to developDO RFP

Start to developDO RFP

Issue DO RFP &

Notice of Intent to Award

Issue DO RFP &

Notice of Intent to Award

Share draftof DO RFP

for comment

Share draftof DO RFP

for comment


• DOE & ESCO begin Project Intent discussion

• ESCO addresses design constraints

• Agency issue of Notice of Intent provides commitment for ESCO to begin Cx activity

Phase 3: Negotiating and Awarding the Phase 3: Negotiating and Awarding the Final Delivery OrderFinal Delivery Order

Negotiate and Issue Final Delivery OrderNegotiate and Issue Final Delivery OrderNegotiate and Issue Final Delivery Order

Notify Congress if cancellation

ceiling >$10M

Notify Congress if cancellation

ceiling >$10M

DESkickoff meeting

DESkickoff meeting

Proposaleval.

Proposaleval.

DetailedEnergySurvey

DetailedEnergySurvey

Issue DOIssue DO

DOE CO review of DO award

DOE CO review of DO award

Confirm that ESCO meets

pre-award requirements

Confirm that ESCO meets

pre-award requirements

Prelim.negotiations

Prelim.negotiations

Ag

en

cy

Join

t E

ffo

rtE

SC

O

DES/finalproposal

DES/finalproposal

Finalnegotiations &

revisions to DO RFP & final

proposal

Finalnegotiations &

revisions to DO RFP & final

proposal


• After Agency Notice of Intent• Form CxP Team (ESCO CX Agent)• ESCO Convenes a Project Intent Workshop• ESCO Drafts Project Intent Document• Use PI Document to guide development of the final

proposal and to increase certainty of acceptance• Refine Project Intent Document based upon

negotiations to match the Final Proposal• ESCO Outline of Cx Plan

Phase 4: Implementing the Delivery Phase 4: Implementing the Delivery OrderOrder

Review and Approval of Design & Construction PackageReview and Approval of Design & Construction PackageReview and Approval of Design & Construction Package

Post-awardconferencePost-awardconference

Payment & performance

bonds

Payment & performance

bonds

Provideproof of

insurance

Provideproof of

insurance

Ag

en

cy

Join

t E

ffo

rtE

SC

O

Reviews and approvals(before construction may begin)

Reviews and approvals(before construction may begin)

Complete/submit designs &equipment selections and

design & construction package, including commissioning plan

Complete/submit designs &equipment selections and

design & construction package, including commissioning plan


• After Delivery Order Award• Refines Project Intent Document based on design

of Energy Conservation Measures (ECMs) • ESCO develops the Cx Plan and submits with

Design & Installation Plans meeting Project Intent– Utilize Design Checklists– ESCO tracks energy and maintenance benefits, and

expected indirect benefits (productivity, satisfaction, and others)

• Agency verifies design using checklists


Installation, Construction Period & Project AcceptanceInstallation, Construction Period & Project AcceptanceInstallation, Construction Period & Project Acceptance

Verify installation;documentation delivered;

req’d training provided

Verify installation;documentation delivered;

req’d training provided

Notice toproceed withinstallation

Notice toproceed withinstallation

InspectionsInspections

Construction/installation

Construction/installation

Punch lists, resolution efforts, reinspections,

clarifications, etc.

Punch lists, resolution efforts, reinspections,

clarifications, etc.

Resolves punch list items,submits req’d documentation,

provides req’d training

Resolves punch list items,submits req’d documentation,

provides req’d training

Acceptanceof installed

ECMs

Acceptanceof installed

ECMsAg

en

cy

Join

t E

ffo

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SC

O


• After Notice to Proceed with Installation• Agency/ESCO Review the the commissioning process

activities, why and benefits, during pre-construction meeting• ESCO Integrates Cx activities during construction and

turnover into project specifications (construction checklists, meetings, performance testing, etc.)

• Agency review selected equipment, materials, and other submittals for compliance with the project intent

• Agency witness selected performance testing


Performance PeriodPerformance PeriodPerformance Period

Eval. of ESCOperformance

to DOE

Eval. of ESCOperformance

to DOE

Joint M&V efforts

(if any, per DO)

Joint M&V efforts

(if any, per DO)

Transfer title to agency, when

applicable

Transfer title to agency, when

applicable

Reconciliation ofenergy savingsperformance (if necessary)

Reconciliation ofenergy savingsperformance (if necessary)

Close outdelivery

order

Close outdelivery

order

Ag

en

cy

Join

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SC

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InvoicesInvoices

PaymentsPaymentsReview and

approve M&V reports

Review andapprove

M&V reports

AnnualM&V

reports

AnnualM&V

reports


• Prior to Acceptance• ESCO completes punch list items• ESCO submits O&M Manuals and conducts training• ESCO Submits As-Builts and Post Installation M&V

report confirming annual cost savings potential • Agency conditionally accepts ECMs (payments begin) • ESCO conducts seasonal testing as required• ESCO submits final Cx Report• Agency reviews final Cx Report

Commissioning Provider Input

• Welcome Voluntary Input from Cx Provider Industry

• Review & Comments on Guidelines, Tools, Templates and Cx for ESPC Information Brochure developed for Agencies and ESCOs (thru 12/03)

• Contact by e-mail– Steve Dunnivant, Cx Working Chair

• [email protected] energy@com

– Doug Dahle• [email protected]

mailto:energy@com

Potential for Cx Agent Role• ESCOs commitment to Integrating Cx

– Using Cx Expertise as subcontractors or company team members

– DOE ESCOs listed at http://www.eere.energy.gov/femp/financing/espc/super_espc_escos.html

• Consider acquiring GSA Energy Management Service Schedule Contract – Provides easier access for Federal Agency procurement of

Cx services– http://www.gsa.gov/Portal/content/pubs_content.jsp?

contentOID=115442&contentType=1008

commissioning of federal energy savings performance contracts (espc) may 20, 2003 doug dahle...

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